Ninth Cir. Reverses Accountant’s Tax Felonies

(CN) – Since an accountant never actually filed the fraudulent income tax returns he handed to investigators, his felony convictions cannot stand, the Ninth Circuit ruled Wednesday. Though he prepared tax returns professionally, Steven Boitano did not file his own income tax returns from 1991 to 2007, according to the ruling. When the Internal Revenue Service began probing the case, Boitano met with agent Nick Connors three times in 2009. At the third meeting, Boitano handed the agent tax returns for 2001, 2002 and 2003. The estimated tax payments that Boitano listed on the three documents were only about half of what the IRS calculated he owed. “Agents Connors quickly realized that the IRS did not have record of receiving the claimed estimated tax payments,” the ruling states. “Therefore, instead of sending the returns to the IRS service center for processing, he confronted Boitano with the discrepancy. According to Connors, Boitano ‘physically got a little pale and said that he was not sure why there [were] differences.'” After ignoring Connors’ request to clarify the tax-payment discrepancies, Boitano pleaded guilty to three misdemeanor charges of failure to file taxes. Three felony counts of making a false statement on personal income tax returns went on to trial, and ended with convictions by a federal jury in San Francisco. He was sentenced to five months in prison for the misdemeanor charges and 36 months for the felony counts. The San Francisco-based appeals court reversed Boitano’s felony convictions Wednesday, however, because the record contains no evidence the deceptive returns were “filed,” a necessary element for conviction under Section 7206(1) of Title 26. Though prosecutors agreed that the convictions must be reversed if it had to prove that the returns were filed within the meaning of IRS regulations, they had argued that federal law does not require proof of filing to establish a violation. The three-judge appellate panel in San Francisco disagreed, citing the 1993 decision by the Ninth Circuit in United States v. Hanson. “Hanson‘s language reflects our court’s reasoned consideration of a matter that was both germane to the case and necessary to the decision,” Judge Morgan Christen wrote for the court. “Hanson specifically argued that his tax returns were not ‘filed’ because the IRS never processed them. The question on appeal was whether the evidence was sufficient to sustain the conviction. We concluded it was because ‘[a] return is ‘filed’ at the time it is delivered to the IRS,’ and the government showed ‘that Hanson personally mailed the forms and that the IRS received them.'” The judge held that the panel can’t re-examine prior panel opinions without an intervening higher authority, namely the U.S. Supreme Court.